In a recent decision, Hidalgo v. Ducoing Management, Inc., the Workers’ Compensation Appeals Board (WCAB) addressed whether lodging and food allowances should be included in the calculation of a worker’s wages for temporary disability benefits. The case involved an injured laborer who claimed weekly earnings of $1,658.46, while the employer argued that his earnings were $620.00 per week. The workers’ compensation administrative law judge (WCJ) initially ruled in favor of including the allowances in the worker’s wages, but the employer sought reconsideration.
Background of the Case
The case arose after an applicant, employed as a laborer, claimed an injury while working on January 26, 2023. Following the injury, a dispute emerged over the calculation of his wages and temporary disability benefits. The worker argued that his weekly earnings amounted to $1,658.46, while the employer contended that they were only $620.00 per week.
The primary point of contention was whether the lodging and food allowances provided to the worker during his employment should be included in his wage calculation. The workers’ compensation administrative law judge (WCJ) initially ruled in favor of the worker, including these allowances in his wages. The employer, however, sought reconsideration of this decision.
The Petition for Reconsideration
The defendant (employer) filed a Petition for Reconsideration, arguing that the WCJ erred in considering the lodging and food allowances as part of the worker’s wages. The defendant also claimed there were mathematical errors in calculating the worker’s weekly earnings and asserted that there was a good-faith dispute regarding the amount owed, making the penalties imposed under Labor Code Section 5814 improper.
The WCJ reviewed the petition and recommended that it be partially granted and partially denied. Specifically, the WCJ suggested upholding the decision to include the lodging and food allowances in the worker’s wages but acknowledged the need to accurately determine the worker’s earnings and associated penalties.
WCAB’s Decision and Analysis
After reviewing the case, the WCAB decided to grant the defendant’s Petition for Reconsideration. The Board rescinded the WCJ’s original Findings and Award and sent the case back to the WCJ for further proceedings. The WCAB’s decision highlighted several important considerations:
Remuneration vs. Special Expenses: The Board emphasized the need to distinguish between “remuneration” (wages) and “special expenses” (costs necessary for employment). They cited previous case law, noting that lodging and food could be considered wages if they provided an economic advantage to the worker. However, in this case, the WCAB found that there was no clear evidence that the lodging and food allowances were part of the worker’s remuneration, as they were provided only while the worker was performing his duties away from home.
Further Development of the Record: The WCAB recommended that the WCJ further develop the record to accurately determine the worker’s earnings, temporary total disability rate, attorney’s fees, and any applicable penalties. This would involve a closer examination of whether the lodging and food allowances provided any economic advantage to the worker beyond covering his employment-related expenses.
Temporary Disability and Penalties: The Board also noted that penalties under Labor Code Section 5814 should be carefully reconsidered, especially in light of the disputes over wage calculations and whether there was a good-faith basis for the employer’s position.
Conclusion
The WCAB’s decision in this case underscores the complexity of determining what constitutes wages for the purposes of calculating workers’ compensation benefits. By remanding the case back to the WCJ, the Board emphasized the importance of a thorough and accurate analysis of all relevant factors, particularly when it comes to distinguishing between wages and necessary employment-related expenses. The outcome of the further proceedings will likely provide more clarity on how such allowances should be treated in similar cases.
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At Yrulegui & Roberts, our Fresno workers’ compensation defense law firm provides aggressive and solutions-focused legal advocacy. We represent employers and insurance carriers. If you have any questions about denying a workers’ compensation claim on the grounds of employee intoxication, please do not hesitate to contact us today. Our firm provides workers’ compensation defense representation in Fresno, Bakersfield, Sacramento, Pasadena, and throughout the region.
